A firm has $ 1.5 million in sales, a Lerner index of 0.57, and a marginal cost

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A firm has $ 1.5 million in sales, a Lerner index of 0.57, and a marginal cost of $ 50, and competes against 800 other firms in its relevant market.

a. What price does this firm charge its customers?

b. By what factor does this firm mark up its price over marginal cost?

c. Do you think this firm enjoys much market power? Explain.

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Managerial Economics and Business Strategy

ISBN: 978-0073523224

8th edition

Authors: Michael Baye, Jeff Prince

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Question Posted: Apr 18, 2014 09:03 AM

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A firm has $ 1.5 million in sales, a Lerner index of 0.57, and a marginal cost

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a 11628 To see this solve the Lerner index formula for P to obtain b ...View the full answer

Managerial Economics and Business Strategy

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